Flexible Hours for Nonexempt Workers May Be Next on Lobbyists' Agenda

Flexible work arrangements traditionally have been the domain of exempt, salaried employees, but now more companies are using them for nonexempt, hourly workers, experts say.

August 4, 2009

With bills circulating in Congress that would enable flexible work schedules, the next focus for Capitol Hill lobbyists may be flextime for nonexempt workers.

Flexible work arrangements traditionally have been the domain of exempt, salaried employees, but now more companies are using them for nonexempt, hourly workers, experts say.

According to a recent study by WorldatWork and Work Design Collaborative, 45 percent of survey respondents report they include nonexempt employees in their flexible work arrangements. The researchers expected to find that only about 15 percent did so, according to the study, which surveyed 135 employers.

But offering nonexempt workers flexible work arrangements may require some changes to the Fair Labor Standards Act, which, among other things, regulates how employers keep track of overtime for nonexempt workers. Tracking overtime can be complicated if an employee is working a flexible work schedule or teleworking.

“We have had the FLSA since the 1930s and there have only been a few amendments to it,” said Ryan Johnson, vice president and a telework expert with WorldatWork. “The question is, are the national laws and rules designed for the modern workforce and workplace, or are they designed for the workplace of 50 to 60 years ago?”

FLSA requires that nonexempt employees who work more than 40 hours a week get paid overtime. This is problematic for nonexempt employees who occasionally want to work compressed workweeks and more than 40 hours a week on other weeks, experts say.

A bill in Congress would allow companies to provide compensatory time for employees in the private sector instead of overtime. This would mean that companies can provide time off with pay instead of overtime pay.

“We oppose the idea of compensatory time instead of overtime,” said Bill Lurye, associate general counsel for the AFL-CIO. “The FLSA only requires a 40-hour workweek and it’s easy to comply with and offer flexible work arrangements. We believe there are companies that have flexible work arrangements that are in line with FLSA.”

A number of organizations, including WorldatWork, are watching the issue closely and expect it to become a larger discussion in coming months.

“Paid family leave and paid sick leave are at the top of our agenda right now, but this is something we are starting to talk about,” said Cara Woodson Welch, director of public policy for WorldatWork.

One organization, Workplace Flexibility 2010, discussed the issue in its May public policy platform on flexible work arrangements.

The group, which is based at Georgetown University Law Center in Washington, calls for the Department of Labor to provide “written guidance, technical assistance and training on how the majority of flexible scheduling arrangements comply with the requirements of the FLSA. Such guidance should provide examples of FWAs that comply with the FLSA, examples of FWAs that do not, and an explanation of the underlying analysis.”

While workplace flexibility advocates argue that more employers will embrace these arrangements for nonexempt workers because they will cut costs and improve engagement and productivity, many are doubtful that this issue is high on companies’ agendas.

“Until you see this issue triggered by collective actions under FLSA or we see a number of overtime claims under FLSA, it’s unlikely that employers will want to have this addressed,” said Drew Matzkin, a partner at law firm Mintz Levin.